[hymanroth]

The mental transaction cost is certainly an issue with content. I wouldn't want to have to decide every time I start reading a news article whether I want to pay to get to the end.

However, the one-off mental cost of deciding whether to allow a web service to bill me for future usage is not a big deal, and, anyway, it applies even more to the choice of upgrading from a free to premium version.

In fact, it applies to any instance where the user is faced with having to pay for something.

What do you propose? Everything should always be free?

As for the scarcity argument, charging for support is a horrible business model. Look at Red Hat's revenues per user vs MSFT's. The key is to leverage the negligible marginal distribution costs of digital content.